Thursday October 29, 2015 | 20 comments
A few weeks ago the Tea Board of India announced that 75% of tea producers in West Bengal (home of Darjeeling) were operating at a loss. An even more devastating story can be told about the tea industry of Sri Lanka as an even higher percentage of tea producers must be supported through government subsidies to keep leaves flowing into the teapots of consumers around the world. How long can this last? What is the source of this problem and what are the consequences? These are important questions that tea lovers and tea business people need to think about as we make both consumption and business decisions. Tea is one of our longest cultivated agriculture products in human history and its impact on society and environment can’t be ignored.
To be direct, the source of this problem is the demand for lower prices. This problem is not just seen in the tea industry, but in all consumer products with the help of the buying and marketing powers of the big box retail system. Consumers have been conditioned to expect lower prices, especially for our most essential life items such as food and tea. The market price for tea has not changed for the past three decades as the tea business has explored new production locations and methods that don’t have as many demanding issues like resource and labor costs. Tea has become a global commodity where all producers of a similar quality product must be on the same playing field competing on price.
Producers have become desperate to find ways to keep production costs down and increase productivity. In reality, the only expense that is controllable, with the help of government lobbying, is the cost of labor. Big tea industry players that are interested in satisfying the demand for low-priced tea have successfully influenced the minimum wage of tea workers to remain low. In West Bengal, where tea production is unprofitable, tea farm workers are paid a minimum wage of 90INR a day, equivalent to about $1.50 a day. In addition to the minimum wage, the tea garden is supposed to provide a list of social programs, but in a recent BBC report it was found that these programs are often not provided to their fullest. Although there are executives that are making these decisions with human hearts, we must keep in mind that they are working to satisfy a demand which originates with everyone’s spending dollars.
Another negative consequence of this phenomenon is environmental. When a tea producer is only able to make a profit with quantity they are forced to seek any option possible to increase production. In recent times, the tea industry has turned to monoculture planting and the use of chemical fertilizers. Both of these actions will result in significantly higher efficiency of land, but have a detrimental impact on the environment. For instance, in Coonoor, Nilgiris, South India, the government was so excited to introduce Camellia sinensis as an economic development tool that communities were encouraged to cut down existing crops and trees to optimize the land space for tea. As a result, many hilltop communities have lost their water source. Where streams and wetlands once existed communities must now truck in water supplies to stay alive. Chemical fertilizers provide immediate supercharged nutrients for tea plants but deplete the nutrients in the soil and put the tea grower in a position where more and more fertilizers must be used each year to keep their plants productive. Fertilizers also pack the soil so it is no longer able to retain water.
The consequences of this problem are real and are being acknowledged by even the largest players in the industry. The Forum for the Future published this report which talks about these topics and poses some solutions. Ultimately, the solution is a higher price for tea. If the tea producer is profitable and empowered enough to focus on quality rather than quantity, they will be able to make better decisions as to how they treat their workers and their land. No one exactly knows what the price of tea needs to be for this level of sustainability, but I have heard figures as high as seven times the current price. As a consumer, if you want to do your part to make this happen, seek out tea sources you can trust and ask questions about where the tea came from. Tea is our lifeblood. Treat it that way.